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Zhejiang free trade zone keeps chugging on

Ma Zhenhuan/Yu Yin
Updated: Oct 08,2021 09:40    China Daily

For Zhou Yuhan, a senior manager with CNOOC Zhejiang Ningbo LNG Co Ltd, what amazed him most was the high efficiency and superb business environment his company witnessed in Ningbo area of Zhejiang free trade zone, especially during the construction of his company's recently launched bonded LNG warehouse, the first one of its kind in Zhejiang.

"It took only eight months between our first application and the final acceptance test of the warehouse. It's really amazing and stunning speed," Zhou said.

China (Zhejiang) Free Trade Pilot Zone in Zhejiang province has been making great efforts to further liberalize trade in the area as well as promote common prosperity and integration of the Yangtze River Delta region.

The zone was expanded last year after receiving approval from the State Council to add Ningbo, Hangzhou and Jinhua-Yiwu areas to its existing Zhoushan area.

First set up in Zhoushan in 2017, the zone back then was made up of both inland and waterside areas covering 119.95 square kilometers. Last year, Zhejiang FTZ doubled its size when the three new areas were added.

In the first half, Zhejiang FTZ added 24,827 market entities, up 100.7 percent year-on-year, accounting for 8.6 percent of the newly added market entities in the province, and contributing 11.4 percent to the province's foreign investment.

Similar yet differentiated responsibilities

Currently, the four areas in Zhejiang FTZ are tasked with different development goals.

Zhoushan area has been forming a complete industrial chain for the oil and gas industry. Ningbo area focuses on the development of oil and gas, new materials, international shipping, global supply chains, foreign trade and intelligent manufacturing.

Hangzhou area has been accelerating the development of the digital economy, and Jinhua-Yiwu area has been building up a new international trade center.

Take Hangzhou area, for example. It has attracted 97 projects with a combined investment of 75.4 billion yuan ($11.61 billion) over the past year, including six projects invested by Global Fortune 500 companies.

The new factory of Hangzhou Panasonic (Comprehensive Bonded Zone) Co Ltd was the first Global Fortune 500 project to break ground in Hangzhou area, with construction beginning in June this year.

With a total investment of 300 million yuan, the 2-hectare smart home appliance manufacturing factory is expected to be put into operation in April next year and generate nearly 8 billion yuan in production value in five years.

It is the attractive preferential policies and favorable business environment in Hangzhou area that have attracted so much investment.

The clustering of market entities has also laid a foundation for more preferential policies becoming available.

Given that more companies involved in the biomedical industry have settled in the area, Hangzhou published measures in July to support the industry in pharmaceutical research and development, as well as overseas sales, which will be first implemented in Hangzhou area.

"Ningbo area, since its launch, has witnessed the landing of 35 major projects, with a total investment of 23.58 billion yuan, and we have worked around the clock to secure our position in project introduction and facilitation," said Zhang Yan, director of the Office of Free Trade Zone in Ningbo.

By the end of August, 66 major projects have been put into use in Ningbo area of the China (Zhejiang) Pilot Free Trade Zone.

The projects were mainly involved in sectors like shipping logistics, smart warehousing, cross-border e-commerce, digital platforms and financial services.

Their operations are expected to generate more than 200 billion yuan ($30.77 billion) in annual revenue, while also bolstering the area's drive to become an internationally influential oil and gas resource distribution center.

Over the past year, Zhejiang FTZ has introduced more than 40 preferential policies in terms of finance, taxation, talent and other areas to facilitate reform and opening-up while the four areas are being developed with different goals.

For example, Zhejiang Petroleum and Chemical Co is the country's only private enterprise to be qualified to import and export raw petroleum, refined oil products and low-sulfur oil when it was approved to import 14 million metric tons of raw petroleum and export 2 million tons of refined oil products and 390,000 tons of low-sulfur marine fuel oil in December.

The zone's Hangzhou area reformed the cross-border retail supply chain by integrating cross-border retail imports with product processing, which enables suppliers to process their products in the bonded area. Due to the system, PT Swift, a brand of edible bird's nests, built a production line in Hangzhou area last year. It can import raw materials from Malaysia, then process directly in the factory after receiving an order and the freshly stewed products will be delivered to consumers the next day.

Ningbo area was the first to join the Qualified Foreign Limited Partner (QFLP) program in the province last year, which encourages foreign investors to get involved in domestic equity investment programs.

Some reforms in Zhejiang FTZ have been promoted in other cities across the country.

The reform in the entry and exit supervision of international ships by Zhoushan area was recognized as one of the best practices by the Ministry of Commerce, which improves the efficiency of international ships entering and leaving the port. The online business mediation platform launched by Hangzhou area was selected as one of the best practices in pilot service trade innovation programs by the State Council, the country's Cabinet.

So far, Zhejiang FTZ has launched 102 major projects, involving a total of 358 billion yuan in investments.

Further on, Zhejiang is planning to develop the FTZ into a demonstration zone for the development of the digital economy. According to the plan, the demonstration zone initially includes the entirety of Hangzhou, the first comprehensive cross-border e-commerce pilot area in the country, and later adds Ningbo and Jinhua in 2021 and 2022, respectively.

Jinhua-Yiwu, Ningbo and Zhoushan areas are jointly building up the Yiwu-Ningbo-Zhoushan corridor, which will become an economic powerhouse that helps form a new trade mode of small and bulk commodities.

Promote common prosperity

"Building Zhejiang into a demonstration zone for achieving prosperity asks for the interconnected development between areas in Zhejiang FTZ," noted Hu Zhenfang, deputy director of the Zhejiang Provincial Department of Commerce.

To stimulate the development of surrounding areas in Zhejiang province, six interconnected innovation areas, including Hangzhou, Ningbo, Wenzhou, Jiaxing, Jinhua and Taizhou, were approved by the Zhejiang provincial government in 2019.

The second batch of interconnected innovation areas was announced in June, including Huzhou, Shaoxing, Quzhou and Lishui.